The U.S. experienced an unprecedented number of new business formations in 2021, and it seems that 2022, although at a slower pace, has shown the same level of growth in entrepreneurship. Despite the pains of economic instability throughout the year due to inflation, Wisconsin still witnessed an increase in new small businesses and entrepreneurs. According to the United States Census Bureau’s Business Formation Statistics, Wisconsin has had over 53,946 new business applications so far in 2022 based on seasonal adjustments. In terms of latest month by month trends, data shows there was a slight decrease in new business applications between September and October throughout Wisconsin from 5,516 to 5,454.
Regardless, the growth of small businesses in the state based on seasonal adjustments has been stable throughout the year with each quarter so far having more than 15,000 new business applications. But what is driving this continued growth in a year with record high inflation? According to research by The Pew Research Center, it is possible that this rise in new businesses throughout the past few years is linked to workers leaving previous jobs during the pandemic. A survey conducted in 2021 found that the top reasons U.S. workers in various industries left their jobs were low pay, no opportunities for advancement, and feeling disrespected at work.
Data from Pew suggests that self-employment was a desirable alternative to traditional work for those who expressed these views, along with wanting to be their own boss or have flexible work hours. But it will be interesting to see what will come of this growth as Q4 and the year as a whole comes to a close. There will be a number of potential factors that could affect how many new businesses form in Wisconsin in the next few months heading into 2023 such as continued inflation, the holiday season, and global supply chain issues.